The funds will focus on clean technology. The Seed fund will have $250 million. It will focus mostly on experimental startups. Khosla Ventures III will have $750 million and will focus on more developed companies.

To me, this development says two things: First, it’s pretty bullish for the cleantech sector. Khosla, one of the most active and aggressive investors in cleantech, has moved away from the personal investing model and managed to convince limited partners to commit a whopping $1 billion. At the same time, it also shows how long cleantech firms take, and how much money they need, to mature compared to, say, infotech firms. Khosla has very few exits or matured revenue-generating companies in his cleantech-dominated portfolio, which he’s been building over several years.